How is it not "commerce among the several states", which the Feds have explicit authority to regulate? It's at least as much "commerce" as growing (or not growing) crops is, which means SCOTUS has effectively decided this question already.

Dr Dreidel:How is it not "commerce among the several states", which the Feds have explicit authority to regulate? It's at least as much "commerce" as growing (or not growing) crops is, which means SCOTUS has effectively decided this question already.

To be fair, four supreme court justices, and very nearly five, just said that Congress is not authorized to levy what amounts to a tax (the individual mandate), so you can never be too sure.

That being said, I do think it is well within the limits of the constitution for Congress to regulate bitcoins. How they will go about doing that, I'm not so sure.

It would be very easy for the U.S. government to regulate bitcoin, or at least, the bitcoin exchanges. If they are located outside the country, the US tells them that they have to accept regulation or be banned from doing business in the U.S. If they don't go along with it, then the U.S. forbids banks and credit card companies and such from doing business with them. If mtgox can't get any real money in or out of it, then mtgox can't do business.

If Bitcoin ever does succeed at becoming a legitimate currency, it will be run by governments and large banks, like all other currencies.

Dr Dreidel:How is it not "commerce among the several states", which the Feds have explicit authority to regulate? It's at least as much "commerce" as growing (or not growing) crops is, which means SCOTUS has effectively decided this question already.

Well would the same be said of WOW currency as well? As I understand it Bitcoins are a lot like that. A group of people assign worth to these and trade amongst themselves you can buy in too if you're will to assign the same amount of worth to it. We know that both WOW currency and Bitcoins have a real world worth because people sell both on the open market and people buy them. Prices fluctuate due to supply and demand.

2chris2:It would be very easy for the U.S. government to regulate bitcoin, or at least, the bitcoin exchanges. If they are located outside the country, the US tells them that they have to accept regulation or be banned from doing business in the U.S. If they don't go along with it, then the U.S. forbids banks and credit card companies and such from doing business with them. If mtgox can't get any real money in or out of it, then mtgox can't do business.

If Bitcoin ever does succeed at becoming a legitimate currency, it will be run by governments and large banks, like all other currencies.

The cynic in me thinks they haven't started regulating it only because they haven't figured out how to make a sure profit off of it. Hence the "it's a house of cards" argument in the article. Once banks figure out how to offload the risk and guarantee a profit, they will get their friends in the government to step in to protect their investments.

The Stealth Hippopotamus:Dr Dreidel: How is it not "commerce among the several states", which the Feds have explicit authority to regulate? It's at least as much "commerce" as growing (or not growing) crops is, which means SCOTUS has effectively decided this question already.

Well would the same be said of WOW currency as well? As I understand it Bitcoins are a lot like that. A group of people assign worth to these and trade amongst themselves you can buy in too if you're will to assign the same amount of worth to it. We know that both WOW currency and Bitcoins have a real world worth because people sell both on the open market and people buy them. Prices fluctuate due to supply and demand.

It's a fun little exercise in economics.

WOW currency (as I understand it) is not designed as a real-world currency. It's an in-game currency that can be transferred to someone else (based on mutual agreement). BitCoins are designed specifically to be real-world digital currency.

It may be a semantic difference, but the difference between what is designed as an actual currency and an in-game currency that has spawned a real-world "currency exchange" to satisfy a market demand doesn't seem a trivial one to me. The difference between "money" and "value", you could say.

Because libertarians believe that if you close your eyes, stick your fingers in your ears, and go "la la la la la", then government goes away.Oh, except for all the roads, schools, and bridges that happen automatically somehow, or could be done better if someone held a monopoly on it, and could charge whatever they wanted.

Dr Dreidel:WOW currency (as I understand it) is not designed as a real-world currency. It's an in-game currency that can be transferred to someone else (based on mutual agreement). BitCoins are designed specifically to be real-world digital currency.

Well you can buy items and currency with dollars. There for you have a dollar to gold ratio. A couple of seconds of google gave me this. Link. So you now have a gold/bitcoin conversion for really US currency. Now I know Blizzard is trying to shut things like this down, why let other people make money off your game, so the US government isn't going to start taxing your WOW characters any time soon. But your time is converted to gold and items those items have a real world value, so what is stopping Uncle Sam from taking a share of that?!

Just in case I'm accused of threadjacking: I'm just wondering how we'll keep the genie in the bottle when it comes to other computer based currencies

2chris2:It would be very easy for the U.S. government to regulate bitcoin, or at least, the bitcoin exchanges

And that's the exact regulation the government is talking about. If you want to exchange dollars and bitcoins, you have to meet the basic standards of an exchange service.

The Stealth Hippopotamus:Well would the same be said of WOW currency as well? As I understand it Bitcoins are a lot like that.

Not really. WoW currency is like Disney Dollars, or store coupons, or tickets at the amusement park. They carry value, but that value is only valid within their domain. I can't go down to a currency exchange and convert by amusement park tickets back into dollars. I can't take those tickets to a different amusement park and expect them to be honored. At best, I can hope to sell them to people walking in the gate as I leave- if they're a sucker, maybe I can make a profit, but I may have to do it at a loss. If I won them in skeeball, then it's probably all profit.

BitCoin is a scarce resource that can be exchanged for other kinds of currency.

The key problem with BitCoin is the same problem that hits all backed currencies- it rewards hoarding.

Mr.Insightful:ontariolightning: Why is it asinine? This was inevitable. And necessary.

Because libertarians believe that if you close your eyes, stick your fingers in your ears, and go "la la la la la", then government goes away.Oh, except for all the roads, schools, and bridges that happen automatically somehow, or could be done better if someone held a monopoly on it, and could charge whatever they wanted.

The Stealth Hippopotamus:But your time is converted to gold and items those items have a real world value, so what is stopping Uncle Sam from taking a share of that?!

Just in case I'm accused of threadjacking: I'm just wondering how we'll keep the genie in the bottle when it comes to other computer based currencies

When you sell stuff, you're supposed to pay taxes on that sale (depending on locale - though the Feds always want theirs. You still would pay taxes on the income earned from the sale to the Feds). Buying WOWgold (or Melthazaringrad's +2 CHR Sword of Bug-Slicing or whatever) is just like buying bananas in that sense.

BitCoins aren't goods (and you'd basically have to repudiate the entire history and raison d'etre of BitCoins to make that argument) - they're currency. The only law needed in this case is to make sure they're covered by existing laws covering currency markets.

The Stealth Hippopotamus:But your time is converted to gold and items those items have a real world value, so what is stopping Uncle Sam from taking a share of that?!

Sequestration.

And the fact that people aren't using it as an investment instrument. If financial institutions started taking clients' money and dumping into WoW, the government would have a responsibility to develop rules governing the practice.

They should be doing that for bitcoins, but an anti-regulatory culture has infected many government agencies over the last few decades, so we'll have to wait until it blows up before they even think about doing anything.

Dr Dreidel:The Stealth Hippopotamus: But your time is converted to gold and items those items have a real world value, so what is stopping Uncle Sam from taking a share of that?!

Just in case I'm accused of threadjacking: I'm just wondering how we'll keep the genie in the bottle when it comes to other computer based currencies

When you sell stuff, you're supposed to pay taxes on that sale (depending on locale - though the Feds always want theirs. You still would pay taxes on the income earned from the sale to the Feds). Buying WOWgold (or Melthazaringrad's +2 CHR Sword of Bug-Slicing or whatever) is just like buying bananas in that sense.

BitCoins aren't goods (and you'd basically have to repudiate the entire history and raison d'etre of BitCoins to make that argument) - they're currency. The only law needed in this case is to make sure they're covered by existing laws covering currency markets.

Just in case I'm accused of threadjacking: I'm just wondering how we'll keep the genie in the bottle when it comes to other computer based currencies

This is what I am curious about, will someone or some agency create the next BitCoin? will Apple truly create iMoney following a similar model?

maybe someone can help who is more familiar with bitcoins, but do the creators profit in any way by creating the currency or was this just an intellectual/economical experiment?

I don't see anyone else trying to create a new currency unless their is some benefit to the creator. That also may be the way to kill this idea, create all types of digital currency and have so many they all lose value.

Mr.Insightful:ontariolightning: Why is it asinine? This was inevitable. And necessary.

Because libertarians believe that if you close your eyes, stick your fingers in your ears, and go "la la la la la", then government goes away.Oh, except for all the roads, schools, and bridges that happen automatically somehow, or could be done better if someone held a monopoly on it, and could charge whatever they wanted.

Kinda reminded me of the "Go Galt! Stick it to the takers" article that gave ideas for ways to avoid taxation that included "Go to the park!"

How in the fark do people actually buy (not mine) bitcoins? From what I can tell to purchase them I need to go to a 7-11 or wal-mart or somewhere and basically wire the money to my bitcoin wallet. Is there anywhere I can just buy them via paypal or something? A digital currency that requires me to go to a physical location and use physical currency to acquire it seems sorta ass backward to me.

Communist_Manifesto:How in the fark do people actually buy (not mine) bitcoins? From what I can tell to purchase them I need to go to a 7-11 or wal-mart or somewhere and basically wire the money to my bitcoin wallet. Is there anywhere I can just buy them via paypal or something? A digital currency that requires me to go to a physical location and use physical currency to acquire it seems sorta ass backward to me.

If you don't mind it being reasonably traceable back to you, a multi-step process from bank account to Dwolla to MtGox (or other exchanges who accept Dwolla) is possible with minor fees. Paypal doesn't want anything to do with BTC for obvious competition reasons, but other smaller Paypal-esque services are willing to play footsie.

t3knomanser:Not really. WoW currency is like Disney Dollars, or store coupons, or tickets at the amusement park. They carry value, but that value is only valid within their domain. I can't go down to a currency exchange and convert by amusement park tickets back into dollars. I can't take those tickets to a different amusement park and expect them to be honored. At best, I can hope to sell them to people walking in the gate as I leave- if they're a sucker, maybe I can make a profit, but I may have to do it at a loss. If I won them in skeeball, then it's probably all profit.

But it has been proven that people have and will trade WoWgold for dollars. The site I gave a link to proves that. So the liquidity of WoWgold is very very high. I'd say it is almost as liquid as Bitcoin. You still have to log onto WoW to make the transfer. And that's the step that will save them from Uncle Sam.And currently both are not taxed because both happen on the internet.

And your example of park tickets doesn't really work because travel agents do it all the time (plane, hotel, park ticket bundles.) but they account for and tax all the sales. So Disney sales X number of ticket to an agent then the agent marks them up a little and sales them to you. More a good than a currency. Throw on top of that that most park tickets have an expiration date on them so they never could be used as currency.

Right now the only difference I see is that major corporations will not accept WoWgold. However I bet you can find a pizza guy who will trade you some pizzas for WoWgold. Working at Papa Johns in college taught me anything it is that you can trade pizza for anything! Any-thing!

t3knomanser:BitCoin is a scarce resource that can be exchanged for other kinds of currency.

Same with WoWgold. There is exactly as much WoWgold as Blizzard will allow. Think Bitcoin or De Beers and diamonds. Also it is in the best interest of Blizzard to control the amount and to make damn sure hackers don't make their own.

thurstonxhowell:It seems extremely obvious. If you use the gold in the game, you don't get taxed. If you convert the gold to money, you get taxed. I see no reason why that shouldn't be the case.

Right now if you sell it on the internet there isn't tax applied.

ProfessorOhki:Actually... I guess the odd question would be if mining bitcoin, but not converting them to dollars counts as income? Maybe selling a pizza for bitcoin falls under bartering income? Anyone?

Actually the way I heard it the very first transact was for two pizzas.

The same amount of bitcoins now would be worth millions! Those were some damn expensive pizzas.

Same with WoWgold. There is exactly as much WoWgold as Blizzard will allow. Think Bitcoin or De Beers and diamonds. Also it is in the best interest of Blizzard to control the amount and to make damn sure hacke ...

From my understandings of how the WoW economy works, 'Gold' supply (in terms of the coinage) is not strictly controlled. There is ingo (quest and combat drops), and constant outgo (repairs, flights, training, basic materials). There's no 'bank' in the business sense, and there's no real way to get one going - there's not much of an economy there to demand it as opposed to an intensive and intricate one such as EVE online.

I don't know if Blizzard does a huge control over the supply of gold as the spigot never stops. They just keep making nifty things that have ever increasing pricing. Ingame.

The Stealth Hippopotamus:ProfessorOhki: Actually... I guess the odd question would be if mining bitcoin, but not converting them to dollars counts as income? Maybe selling a pizza for bitcoin falls under bartering income? Anyone?

Actually the way I heard it the very first transact was for two pizzas.

The same amount of bitcoins now would be worth millions! Those were some damn expensive pizzas.

But without the publicity from that early transaction, they'd never have inflated to this point and they wouldn't be worth millions. It's a chicken and pizz- Er, egg and pizz- you know what I mean.

ProfessorOhki:The Stealth Hippopotamus: ProfessorOhki: Actually... I guess the odd question would be if mining bitcoin, but not converting them to dollars counts as income? Maybe selling a pizza for bitcoin falls under bartering income? Anyone?

Actually the way I heard it the very first transact was for two pizzas.

The same amount of bitcoins now would be worth millions! Those were some damn expensive pizzas.

But without the publicity from that early transaction, they'd never have inflated to this point and they wouldn't be worth millions. It's a chicken and pizz- Er, egg and pizz- you know what I mean.